When a Perfectly Competitive, Well-Functioning Market Is Not in Equilibrium

question 74

Multiple Choice

When a perfectly competitive, well-functioning market is not in equilibrium:

• A) total surplus is not maximized.
• B) any additional changes to make someone better off will make someone else worse off.
• C) the market is efficient.
• D) All of these are correct.

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Definitions:

Debt to Equity Ratio

A financial ratio that compares the total liabilities of a company to the total amount of shareholder equity.

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity position of the business.

Long Term Liabilities

Obligations or debts that are due to be paid after one year or more, such as bonds payable or long-term loans.

Price-Earnings Ratio

A financial ratio that measures a company's current share price relative to its per-share earnings, used for valuing companies and comparing their financial health.